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EU watchdog green lights Project Oscar digital wallet partnership

European competition regulators have given the go-ahead to a joint digital wallet venture being pushed by a trio of leading UK mobile phone operators.

Project Oscar is a collaborative effort between Everything Everywhere, Telefonica subsidiary O2, and Vodafone, aiming to roll out a unified NFC payment system across the smartphone sector.

The EU investigation was launched back in April after rivals like search giant Google and competing mobile network Three raised concerns that the project was going to end up being "discriminatory," as the partnership involved controlled more than 90 per cent of the UK mobile market combined.

However, the European Commission has ruled in favour of the Project Oscar collective, stating that a number of possibilities existed for the development of alternative mobile payment systems not directly tied to networks or SIM cards, making the joint venture unlikely to restrict consumer choice via its technical or commercial strategy.

NFC payment systems typically work by enabling users to store their debit or credit card information on to their handset, but can also function by allowing people to pre-load a set amount of cash on to their device externally, as with a PAYG phone contract or an Oyster card.

Barclaycard, Visa, PayPal, and Google are among the other firms looking to make inroads into the nascent mobile wallet market - only yesterday, the Quick Tap contactless payment system formed by an Orange/Barclaycard partnership began arriving for the Samsung Galaxy S3.

"The Commission is keen on promoting innovation in this area and ensuring that the markets remain open so that a number of competing solutions can emerge without undue obstacles, to the benefit of consumers," said Competition Commissioner Joaquín Almunia (top) in a statement.

Following the EC decision, the Project Oscar group stated that it intended to push ahead with the formation of a new company "as quickly as possible," but was no being drawn into setting a target date for rollout of a service.